Newpark Reit, which owns the JSE’s office building in Johannesburg, almost doubled interim profit as it continues to seek opportunities to expand.
Earnings for the six months to end-August soared 87.7% year on year to R37m, while headline earnings per share — which excludes one-time items — rose by a similar margin to 37.03c, the company said in a statement on Wednesday.
Revenue was up 16% year on year to R59.5m and the interim dividend was increased by 15.4% to 25c.
“The solid underpin provided by a combination of assets that have sound property fundamentals and a high-quality tenant mix has proven its worth amid very difficult operating conditions,” said the company, which is valued at R379m on the JSE.
“Over the next year to 18 months Newpark will look to secure lease renewals and extensions for various key tenants in its portfolio with the objective of improving the weighted average lease expiry of the portfolio,” it said.
Newpark has focused on managing its existing properties during the Covid-19 pandemic as the market took a downturn, but now aims to build a portfolio of property assets that can withstand tough economic times and offer good returns.
All four properties it owns are in Johannesburg: two in Sandton, one in Linbro Business Park and the other at Crown Mines.
The gross lettable area of these properties is 57,468m² with a 9.6% vacancy rate. All the vacancies are at 24 Central in Sandton.
The combined value of the four properties is R1.33bn, with the flagship JSE building worth R723.3m.
Newpark is aiming for funds from operations per share — the measure it uses to determine distributable income per share — to grow more than 15% year on year to “at least” 53.61c in its results for the full year. That is expected to be driven in part by the lifting of Covid-19 restrictions, which has eased pressure on tenants, and a key office tenant renting more space at 24 Central. The company is also expecting higher advertising and parking revenue from the property.
The company announced in July that CEO Simon Fifield will resign in November to “allow him more time to focus on other opportunities”. Auri Benatar, executive director of Trademarc Property Fund, and Wainer and Associates Property Consultants, will take over at the helm.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.